Question: this question is in refrence to the Fabricare case study. In the valuation of Fabricare, Roy is trying to decide the price he is willing

this question is in refrence to the Fabricare case study.

In the valuation of Fabricare, Roy is trying to decide the price he is willing to pay for the firm. In a proper valuation of Fabricare, what role should (1) the liquidation value (2) the book value of the assets to be acquired from Fabricare; (3) price-to-earnings ratios for publicly traded maintenance firms; (4) market value as a percentage of sales analysis for publicly traded firms; and (5) an estimate of the value of Fabricare under current management play in the analysis? In addition to explaining the roles, if any, for each option, be sure to provide the dollar value under each option. Note: The value of Fabricare under current management can be estimated using the formula for the present value of a growing perpetuity, also known as the constant growth model (see Chapter 6).

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